Domestic Economy Continues Economic Recovery

29.10.2021

WIFO Flash Estimate: +3.3 Percent in the Third Quarter

According to the latest WIFO Flash Estimate, Austrian economic output expanded by 3.3 percent in the third quarter 2021 compared with the previous quarter. The recovery thus continued.

Important information

Since the end of September 2020, the quarterly accounts are compiled and published by Statistics Austria. The WIFO Flash Estimate builds on this calculation and provides an estimate for the following quarter. This includes GDP and components in the form of seasonally and working-day adjusted rates of change compared with the previous quarter (key figure according to Eurostat standard).

The figures presented in this calculation are first estimates and as such are subject to uncertainties and possible revisions.

At the end of November 2021, Statistics Austria will publish the quarterly data for GDP and main aggregates for the second quarter of 2021 based on more complete data.

After the second quarter of 2021 was still partly affected by restrictive measures to contain the COVID-19 pandemic, these were largely relaxed or lifted in the third quarter. This led to a strong increase in consumer demand of private households. The corresponding service sectors also grew very strongly. Industrial activity stagnated at a high level.

After the high growth in the second quarter of 2021, which was characterised by easing measures, the domestic economy expanded again in the third quarter of 2021. According to the first calculations, GDP increased by 3.3 percent in the third quarter of 2021 compared with the previous period (key figure according to Eurostat). This means that domestic economic output was 4.8 percent higher than in the same quarter of the previous year.

Growth was mainly driven by services, as official restrictions, which were still partially in place in the second quarter, were largely lifted in the third quarter. As a result, there was a further expansion in value added in trade, transport, accommodation and food service activities (+16.3 percent, up from +17.2 percent quarter-on-quarter in the second quarter of 2021) and other services (+10.3 percent, up from +8.8 percent in the second quarter of 2021; includes, among others, arts, entertainment and recreation and body-related services). Consumer demand of households (including private non-profit institutions serving households) also rose strongly (+8.2 percent, after +1.9 percent in the second quarter of 2021).

The industrial economy, which has been on the road to recovery since mid-2020, has recently stagnated. Value added in industry (NACE 2008, sections B to E) increased slightly by 0.8 percent in the third quarter (after +0.3 percent in the second quarter). In the construction industry, the high momentum of the second quarter was not continued. Compared with the previous year, construction output still expanded robustly, but compared with the previous quarter, value added fell (–2.2 after +0.6 percent).

The development of investment demand was also sluggish compared with the previous quarter. Gross fixed capital formation stagnated in the third quarter (–0.4 percent). Likewise, foreign trade momentum – influenced by high price increases – slowed noticeably compared with the previous quarter: exports fell by 4.1 percent, imports by 5.0 percent.

  

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Mag. Sandra Bilek-Steindl

Research groups: Macroeconomics and European Economic Policy

Dr. Jürgen Bierbaumer, MA

Research groups: Macroeconomics and European Economic Policy
© Jay Ee/Unsplash
© Jay Ee/Unsplash